donheff
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I am having a hard time understanding Turbo Tax. First, a little background. DW and I have used an accountant for years because DW partenership income was complicated with multiple states involved. Starting in 2010 DW is semi-retired. She will remain on the firm's rolls with a $29K COLAd income and in return she will do some business development for the firm and will not practice law elsewhere. In the past, we filed quarterlies but now I have increased my withholding to accomodate my pension, her annual $29K, plus anticipated dividends/CGs. I set the initial withholding rate based on guestimates and the tax tables for 2009. Now I am attempting to fine tune withholding using Turbo Tax by entering anticipated 2010 earnings into 2009 turbo tax to see what next year's earnings would be based on this year's tax situation.
Here is the problem. Since she is still partner, DW has to contribute $4K of her $29K to a retirement plan (401K like). The retirement amount appears as a deduction in block 13 of her K-1 form. When I entered all of our anticipated earnings in TT, including the $4K deduction in box 13, TT seemed to end up with too high a taxable income. And in its summary of our situation I couldn't see anything that indicated that it took into account the $4K. I re-ran TT using $25K as DWs total income (instead of $29K) and removed the $4K entry for box 13. Now TT returns a taxable amount $4k lower - like I would have expected.
Does anyone else use K1s with TT? Do you know what is going on here?
Here is the problem. Since she is still partner, DW has to contribute $4K of her $29K to a retirement plan (401K like). The retirement amount appears as a deduction in block 13 of her K-1 form. When I entered all of our anticipated earnings in TT, including the $4K deduction in box 13, TT seemed to end up with too high a taxable income. And in its summary of our situation I couldn't see anything that indicated that it took into account the $4K. I re-ran TT using $25K as DWs total income (instead of $29K) and removed the $4K entry for box 13. Now TT returns a taxable amount $4k lower - like I would have expected.
Does anyone else use K1s with TT? Do you know what is going on here?